ECS2604
ASSIGNMENT 4 SEMESTER 2 2024
UNIQUE NO.
DUE DATE: 8 NOVEMBER 2024
, ECS2604
Assignment 4 Semester 2 2024
Unique Number:
Due Date: 8 November 2024
Labour Economics
Question 1
1. When the labour demand curve shifts rightwards, at the new equilibrium:
(a) There is no change in wage.
(b) The wage decreases.
(c) The wage increases.
(d) The labour supply curve also shifts rightwards.
(e) The labour supply curve shifts leftwards.
Answer: (c) the wage increases.
When the demand for labor goes up (shifts rightward), it means that employers are
looking to hire more workers. With higher demand for workers but the same supply of
people available to work, wages generally rise. It’s like in any market—when something
is in higher demand, prices (or wages, in this case) go up. So, we’d expect wages to
increase.
2. The hourly wage of Thandi decreases from R150 to R100. What will happen to
her budget line?
(a) Gets steeper.
(b) Shifts up without changing its slope.
(c) Shifts downwards.